And Now A Word From The Panel: 20/20 MDL Vision

Welcome to the 20th installment of “And Now a Word from the Panel,” a bimonthly column which “rides the circuit” with the Judicial Panel on Multidistrict Litigation as it meets at venues around the country.

But before we embark on that retrospective journey, let us pause for a moment to reflect on the present. As in years past, the panel once again heads to its usual early Spring destination of the Golden State of California for its March hearing session. But after years of traveling to America’s “Finest City” of San Diego — which this column previously observed was the panel’s March choice of venue for seven consecutive years — the panel shifts north to Santa Barbara for its March 31 hearing session.

Looking back on the January hearing session, the panel began the new year once again scrutinizing MDL petitions, denying more motions to create MDL proceedings than it created (more on that later). And the overall total of existing MDL proceedings has now dropped to 261, with the panel terminating a total of 14 MDLs in the first two and a half months of this year.

Looking Back: A Fantasy Football MDL!

As readers of this column are aware, at its January hearing session, the panel considered whether to create an MDL for a series of actions against providers of fan versus fan online daily and weekly fantasy sports contests. In re Daily Fantasy Sports Marketing and Sales Practices Litigation (MDL No. 2677); In reDraftKings Inc., Fantasy Sports Litigation (MDL No. 2678); In re FanDuel Inc., Fantasy Sports Litigation (MDL No. 2679). At the time of the panel’s decision, there were 80 tag along and related actions encompassed by those three proposed MDLs. As discussed in our last column, the allegations involved different theories of liability arising from different alleged conduct, including employees using “inside information” to participate in competitors’ fantasy contests, deceptive offers to match initial deposits and illegal gambling.

As expected, the issue was not as much whether to create an MDL, but rather where the MDL would be located. In creating a single “In re: Daily Fantasy Sports Litigation” MDL for all three proposed MDL dockets, the panel found that the existence of “differing theories of liability ... [is] not a bar to centralization where common factual issues exist.” The panel also noted the “substantial overlap among the asserted putative classes” and that some of the employees would be witnesses in all actions. In expressing the deference given to an MDL judge’s management of the litigations, the panel left it to that judge as to how best use “appropriate pretrial devices, such as separate tracks for discovery or motion practice” and whether and when to suggest remand of cases back to their transferor courts.[1]

With respect to choice of the venue, the panel ultimately selected the District of Massachusetts on the ground that:

Plaintiffs and defendants in at least seven actions supported selection of the district;

A significant number of related actions which encompassed all three theories of liability were pending in the district; and

One of the defendants is headquartered in the district and individual defendants reside nearby.

20/20 MDL Vision

Looking back, with a bit of 20/20 hindsight since this column first appeared in January 2013, the following are the key takeaways from the various panel practices and tips presented over the past three years:

1. Saying No to MDLs

In our very first column, we examined the factors that may lead the panel to “Just Say No” to an MDL petition.[2] As we have seen from the panel over the past several years, it has been increasingly scrutinizing MDL petitions. At the January hearing session, out of the 10 potential MDL dockets considered, the panel created only two new MDL proceedings (including the new Fantasy Football MDL which was the subject of three proposed MDL dockets) and denied six petitions.[3] From time to time, we have questioned whether we can fairly characterize the lower percentage of new MDLs as a panel “trend.” Although the days of the panel granting 85 percent of MDL petitions, as was the case in 2008, are likely behind us, we will continue to watch the panel’s average and whether it will break .500 for this year.

Practitioners should continue to bear in mind the following factors that the panel has used in denying petitions to create MDL proceedings, including factors that the panel used to deny various petitions considered at the January hearing session:

Absence of common factual issues

Overlapping counsel

Limited number of actions

Cases with different procedural postures

Nonoverlapping putative class actions

No overlapping plaintiffs or defendants

State-specific legal and factual inquiries

Available alternatives to MDL coordination.

2. MDL Deja Vu?

Over the past few years, we have seen second attempts to create an MDL notwithstanding the panel’s rejection of a prior MDL petition arising from the same alleged conduct.[4] The panel has observed that it will grant a subsequent petition “only rarely, however, where a significant change in circumstances has occurred.”[5] The party seeking a “second chance” at an MDL bears the burden of showing:

Growth in the number of actions

Expansion of the geographic location of the litigation

Existence of common factual issues

Similar procedural posture of the various actions

Lack of feasibility of informal coordination.

3. Location, Location, Location

One of our most exciting topics in the world of MDLs is venue — i.e., which federal district will be selected as the MDL transferee court for a particular new MDL proceeding.[6] As noted above in connection with the new Fantasy Sports MDL, the panel will often look to:

Districts suggested by the parties

Defendants headquarters

Location of witnesses and documents

Location of pending actions

But as we have reminded our readers, the absence of an action in the proposed transferee district “is no impediment to its selection as transferee district.”[7]

4. And our [Judicial] Nominees are ....

It is a common practice for parties to suggest a particular MDL transferee judge, in addition to suggesting a transferee judicial district. In suggesting a particular jurist, practitioners may want to consider the following factors, including whether the judge has:

Been assigned to a particular action

The first-filed action

MDL experience (or perhaps conversely, precisely because the judge has not yet had MDL experience, the judge would make a good choice)

Experience with a similar type of case.[8]

5. Why Sports?

Readers may be wondering why recent columns have seemingly been obsessed with the confluence of the worlds of sports and MDL proceedings.[9] Besides being unable to resist the lure of sports metaphors, puns and analogies, the highlighting of these sports MDL illustrates that:

MDLs cut across all types of industries

The factors that the panel applies in evaluating sports MDL petitions are indicative of the factors applied to other petitions before it.

What issues are in the panel’s view at its next hearing session? Will the panel continue its trend in scrutinizing MDL petitions? Will we, with 20/20 hindsight, glean any additional panel lessons? Stay tuned for our May edition of “And Now a Word from the Panel,” as the panel heads — for the second time in three years — to the “Windy City” (Chicago) for its May 26 hearing session.

[3] This includes the denial of a motion for reconsideration of the Panel Clerk’s determination that a proposed MDL had lost its multidistrict character because there were no longer two federal cases pending in different districts. See In re Wells Fargo Inspection Fee Litig., MDL No. 2681 (J.P.M.L. Feb. 2, 2016).

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